Revealed – the true scale of affordable housing lost to permitted development rights

New analysis sheds light on the impact of a social housing get out clause in England. Our research estimates that urban authorities have missed out on over 10,000 affordable homes between 2015-16 and 2017-18.

In 2018, Theresa May promised a ‘new generation of council homes to help fix our broken housing market’. We welcome this, and the announcement of an additional £2 billion for housing associations to help deliver on it. With just under 6,500 socially rented houses delivered in 2017-18 we are in a historically low period of social housing delivery[i].

But this new evidence suggests that the extension of a social housing get-out clause could undermine the delivery of the Prime Minister’s promise, with the proposal representing a threat to social housing delivery.

The social housing get-out clause

Currently in England it is possible for developers to deliver housing through a system known as permitted development rights (PDR). Developments delivered through this system do not need to go through the full local planning process, meaning that local authorities (LAs) cannot scrutinise a development proposal for key issues such as quality or space standards.

LAs also cannot enter into Section 106 agreements with developers. LAs therefore cannot require a developer to supply any on-site or off-site affordable housing contributions. So, developers have a social housing get-out clause under the PDR system.

Currently this system is being used to convert offices, agricultural buildings, and storage into homes outside of the normal planning rules.

Developers have embraced this model, and housing delivered through PDR has become an important component of overall supply. In urban authorities between 2015-16 and 2017-18 over 36,000 dwellings were delivered in this way, making up 1 out of every 10 properties.

Even though the PDR system is delivering new housing, we’re concerned that PDR supply is coming at a considerable cost, notably in the delivery of genuinely affordable housing for those that most need it.

Our analysis confirms the scale of the problem. We estimate that urban authorities have missed out on over 10,000 (10,340) affordable homes over the last three years due to this process.

We analysed local planning documents from urban local authorities in England which set out the affordable housing contributions required for development across the authority.

For example, Newham’s policy states that:

‘Between 35 per cent and 50 percent of all housing development of 10 or more homes will have to be affordable housing’[ii].

By applying the stated policy for affordable housing for each local authority to the total number of permitted development units delivered in each of these authorities in the last three years, We’ve estimated how many affordable housing units would have been delivered in that authority if those developments had gone through the full planning process.

The table below shows the results of our analysis between 2015-16 and 2017-18.

The government’s current consultation on planning reform seeks to expand the PDR system.

In a serious challenge to social housing delivery, a government proposal within the consultation could see PDR cover all redevelopment of commercial buildings into housing, including where the original buildings are demolished and completely redeveloped.

Our new analysis points to the current impact of PDR on the delivery of affordable housing, which includes social housing and provides a stark warning on the potential damage of extending this get-out clause. The current government consultation on planning reform provides a crucial opportunity to make the case for this alternative path.

We call on government not to expand the PDR system as it is not a solution to our housing crisis. Collectively, land-reform, enhanced grant funding for social housing, and a strong regulatory planning system are.

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